Oct202005

SD-366Energy Committee Hearing Room02:30 PM

Mr. Douglas Faulkner

Acting Assistant Secretary , Department of Energy

Statement of Douglas L. FaulknerActing Assistant Secretary for Energy Efficiency and Renewable EnergyU.S. Department of EnergyCommittee on Energy and Natural ResourcesUnited States Senate

October 20, 2005

Mr. Chairman and Members of the Committee, I appreciate the opportunity to testifytoday on S. 1016, requiring the Secretary of Energy to make incentive payments to theowners of qualified desalination facilities to partially offset the cost of electrical energyrequired to operate facilities, and S. 1860, which would amend the Energy Policy Act of2005 to improve energy production and reduce energy demand through improved use ofreclaimed waters and other purposes.

Although supplying and distributing water is largely a local responsibility, we believethere is a Federal role in providing appropriate scientific and technological support forthese efforts. S. 1016, however, poses a narrower question: Should the Department ofEnergy subsidize electricity costs at desalination facilities? We believe the answer is no.While well intended, S. 1016 is not a comprehensive approach to the challenge we face.It would subsidize a narrow group of electricity users engaged in water desalinationefforts, and could divert limited Federal funding from efforts to engage in a morecomprehensive approach.

It is our view that incentive payments are not the best means to remove the energy costbarriers to desalinating water. Instead, we feel continued targeted Federal support fordesalination research and development consistent with the Administration’s Research andDevelopment Investment Criteria, as well as our ongoing efforts to reduce energydemand and increase supply through the adoption of comprehensive energy legislation,will have a larger impact in the long-run on reducing desalination costs than will makingincentive payments to the owners or operators of individual facilities.

The Department of Energy finds S. 1860 to be well intentioned as it shares our view thatwe must develop innovative new approaches to dealing with the regional, national, andglobal challenges related to water availability and quality. However, we have severalconcerns regarding the specific language of this bill.

First, the bill appears to shift substantial statutory authority from the Secretary to thedesignated National Labs and places the lead National Labs in inappropriate roles forassessing Federal funding and activities across agencies. We are also concerned that thebill appears to leave out the private sector and its key role in RD&D and commercialization.

The bill places as much as two-thirds of the funding at the lead National Labs, largelyoutside of any merit-based competitive process and it does so with little flexibility, notrecognizing that the allocation of funding will vary with the status of technology RD&Dand commercialization, and private sector roles. We believe that the funding levels, rolesand responsibilities for the Labs, Universities, and private sector should be determined bythe Secretary in order to meet the national needs identified by the legislation.

We share the view that we must develop innovative new approaches to dealing with theregional, national, and global challenges related to water availability and quality, and thisis an issue that is commanding significant attention at the highest levels of theAdministration.

For example, in August 2004 the White House Office of Science and Technology Policy(OSTP) and Office of Management and Budget (OMB) identified water as a topAdministration research and development priority and called upon the National Scienceand Technology Council (NSTC) to “develop a coordinated, multi- year plan to improveresearch to understand the processes that control water availability and quality, and tocollect and make available the data needed to ensure an adequate water supply for theNation’s future.” The NSTC Committee on Environment and Natural Resources hasformed a Subcommittee on Water Availability and Quality (SWAQ) comprised of morethan 15 Federal Departments and Agencies who are now in the process of developing acomprehensive research plan. Their first report, “Science and Technology to SupportFresh Water Availability in the United States,” was released in November, 2004. Amongthe points highlighted by this report are the following:

· We do not have an adequate understanding of water availability at national,regional, or local levels.

· Water, once considered a ubiquitous resource, is now scarce in some parts of thecountry—and not jus t in the West as one might assume.

· The amounts of water needed to maintain our natural environmental resources arenot well known.

· We need to evaluate alternatives to use water more efficiently, including technologies for conservation and supply enhancement such as water reuse and recycling as a way to make more water available.

· We need improved tools to predict the future of our water resources to enable usto better plan for the more efficient operation of our water infrastructure.

The Water Desalination Act of 1996 (Public Law 104-298) gave lead responsibility to theDepartment of the Interior to conduct, encourage, and assist in the financing of researchto develop cost-effective and efficient means for converting saline water into potablewater suitable for beneficial uses. We are looking at ways to better coordinate our effortswith those of the Department of the Interior and other agencies through the processunderway in the NTSC’s Subcommittee on Water Availability and Quality.

At the Department of Energy, we have been in serious discussions with some of our labson what we call the “energy-water nexus.” The relationship between energy and water isnot well understood by the public, and it is surprising to many, for instance, that theamount of fresh water withdrawn nationally for electricity production is more than twiceas much as the water used for residential, commercial, and industrial purposes, and iscomparable to the amount of water used for agricultural irrigation. Meanwhile, pumping,storing, and treating water consumes huge amounts of electricity—an estimated 7 percentof California’s electricity consumption is used just to pump water.

We understand that our energy and water supplies are interconnected. In fact, as muchenergy is used for water and wastewater purposes as for other major industrial sectors ofthe U.S. economy such as paper and pulp and petroleum refining.

Although the hearing today focuses on producing drinkable water through a technologicalprocess, the equally important aspect of the larger issue is finding ways to reduce waterconsumption and remove some of the demand pressure from regional water supplies.Price and regulatory signals can create market incentives to reduce water use. One areafor consideration is the water intensive process of thermoelectric generation from fossilfuels such as coal. For these systems, an average of 25 gallons of water is withdrawn toproduce a kilowatt hour (kWh) of electricity of which nearly one-half gallon is consumedby evaporation. Overall, fossil- fuel- fired power plants require withdrawals of more than97 billion gallons of fresh water each day.

The Department’s Office of Fossil Energy is supporting several research projects aimedat reducing the amount of fresh water needed by power plants and to minimize potentialimpacts of plant operations on water quality. One project at West Virginia University isassessing the feasibility of using underground coal mine water as a source of coolingwater for power plants. A North Dakota project is attempting to reduce the waterconsumption of power plants by recovering a large fraction of the water present in theplant flue gas. A project in New Mexico is exploring whether produced waters, the byproduct of natural gas and oil extraction which often present a disposal issue, can be usedto meet up to 25 percent of the cooling water needed at the San Juan Generating Station,as well as investigating an advanced wet-dry hybrid cooling system. In addition, theDepartment currently has a competitive solicitation on the street seeking additionalinnovative technologies and concepts for reducing the amount of fresh water needed tooperate fossil-based thermoelectric power stations, including advanced cooling and waterrecovery technologies. The Department is also investigating whether a suite of speciallyselected, salt-tolerant agricultural crops or other plants can be used to remove sodium andother salts from coalbed methane produced water so that it can be safely discharged orused in agriculture.

One promising new approach to electricity generation, Integrated Gasification CombinedCycle (IGCC) technology that converts coal and other hydrocarbons into synthetic gas,offers significant environmental and water benefits compared to traditional pulverizedcoal power plants. Because the steam cycle of IGCC plants typically produces less than 50 percent of the power output, IGCC plants require 30 to 60 percent less water thanconventional coal- fired power plants. The Department is supporting research, development, and demonstration on a number of advancements that will significantlydrive down the costs of IGCC plants.

The Fossil Energy office is also supporting work at the University of Floridainvestigating an innovative diffusion-driven desalination process that would allow apower plant that uses saline water for cooling to become a net producer of fresh water.Hot water from the condenser provides the thermal energy to drive the desalinationprocess. Using a diffusion tower, saline water cools and condenses the low pressuresteam and fresh water is then stripped from the humidified air exiting the tower. Thisprocess is more advantageous than conventional desalination technology in that it may bedriven by waste heat with very low thermodynamic availability. In addition, cool air, aby-product of this process, can be used to cool nearby buildings.

The Department’s Office of Energy Efficiency and Renewable Energy (EERE) issupporting R&D for innovative wind and solar electricity supply technologies that haveattributes that may prove to be very beneficial to the desalination industry.

For example, wind power is now becoming a competitive, clean, bulk electric powersupply option in many areas of the Nation, and places no further demand on watersupplies for its operation. In addition, excellent offshore wind resources are availablenear many coastal areas facing water supply challenges. The role that wind could play inpowering desalination could take a range of forms, from stand-alone systems exclusivelypowered by wind, to desalination plants that receive the majority of their energyrequirements from wind power delivered via electricity grid systems. In either case, therelative ease and low cost of storing desalinated water, in comparison with storingelectricity, will allow operating flexibilities that will facilitate using inherently variablewind power as a primary energy source for desalination.

We are currently funding a concept design study which will set up engineering andeconomic models to examine viability of wind-powered reverse osmosis systems, lookingat applications for coastal seawater, inland brackish water, and water produced during oilor gas recovery. A second project will model solar and wind resources for a desalinationunit to determine the effects of variable loads on desalination, and perform pilot-scaletesting to determine how renewable energy could reduce desalination costs.

We are also undertaking a mapping project to overlay data such as fresh and brackishwater resources, wind resources, water consumption, estimated growth, and electricitysupply. Two maps will be developed, one of the United States, and one for the four-stateregion of Colorado, Utah, Arizona, and New Mexico, identifying locations that have thebest economic and technical potential for using wind to power desalination. Even as we proceed with these activities, we are mindful that the energy intensive technique of reverse osmosis we use for desalination today may not be the membrane technology of tomorrow. But whether that breakthrough comes from a lab working specifically on desalination, or through an area of broader scientific research remains to be seen. The Department’s Office of Science, for example, is studying microbes and smart membranes that may ultimately have relevance to desalination in the future.

Having said that, it seems certain that desalination will play an important role inmaintaining and expanding our Nation’s, and indeed, the world’s water supply. Wherefresh water aquifers are under pressure in many regions, over-drafted and subject to saltwater intrusion, brackish aquifers can be found throughout the country and the world, aready source of new water. More than 120 countries are now using desalinationtechnologies to provide potable water, most commonly in the Persian Gulf where energycosts are low. The desalination plants of the future must come in a range of sizes so thatthey can be installed where demand exists—smaller footprint facilities which can makeuse of smaller deposits of impaired water, at a price the community can afford. ForAmerican companies, the growing need for desalination will open new global markets.Mr. Chairman, this completes my prepared statement, and I am happy to answer anyquestions the Committee may have.